But you don't want to devalue from one fixed peg to another. You want to defend an upper bound to the read exchange rate, and then use accumulated hard currency reserves to act in a discretionary manner to defend your national economic interest against speculative hot money.

Oh, and you want to withdraw rediscount facilities from all banks that assist in speculative attacks against your currency. You can't attack a currency unless you can short it, and you can't short it unless its central bank is being a sucker.

The take-away point there is that central banks either don't understand the world economy or they're complicit with the predators.

While everyone is pretending that these investor attacks on sovereign political entities which we know as nation states are somehow the fault of the nation states themselves it's impossible to deal with the political reality of what's actually happening - which is that a gang of thugs with baseball bats is kicking in the windows of democracy.

This is an extended economic Kristallnacht. It's soft violence-by-spreadsheet rather than hard violence with a fist to the face. But it's still criminal violence, with immensely destructive consequences - and not the genteel debate about financial niceties that it pretends to be.

Here's a useful graph of UK insolvencies. (The downtick last year was the result of new legislation which created a simplified pseudo-bankruptcy process for certain debtors.)

Considering that Osborne's plan seems to be to move public debt to private households, the next few years aren't going to be a happy experience for many people.

And it's not quite true that you can't short a currency unless the CB is being a sucker. The CB is just the most common sucker in a Soros attack, but any entity that has domestic currency lying around in large quantities can be the sucker.

Also, if your CB is not committing to defend a lower bound, it should be brokering currency swaps between foreign central banks and domestic firms that are considered to be of strategic importance and require imports of raw materials or intermediate goods. That way, you would minimise disruptions in the event of a Soros attack that you find yourself unable to defend against.